Bitunix Analyst: Strong Non-Farmers Are Rewriting Market Pricing, AI Fanaticism and Geographic Risk Simultaneously Entering the Stress Test Phase
Comparing news, the three forces that focus on the global market — geographic risk, inflation risk, and capital demand — are beginning to impact the market at the same time. After Iran responded to Israel's military action with missiles, Trump personally intervened and attempted to lead the US-Iran agreement process, but Israel still reported that it intended to attack Iran's energy facilities, which meant that the energy supply risk had not yet been lifted. Meanwhile, US non-farm payrolls greatly exceeded expectations in May, which not only overturned the market's expectations of interest rate cuts during the year, but also rapidly heated up the probability of raising interest rates again before the end of the year. The market began to reprice higher interest rates and maintain a new environment for a longer period of time.
Looking at policies and capital flows, the biggest change at present is not the risk of economic recession, but rather the market is beginning to realize the dilemma faced by the Federal Reserve. Strong employment means that the demand side is still resilient, but the energy prices fueled by the Middle East conflict may further spread to inflation. In this context, the US CPI to be announced this week will be the key verification. If the rise in energy prices starts to be reflected in inflation data, the pressure on the Federal Reserve to remain hawkish or even rediscuss interest rate hikes will continue to increase. This is also the core reason for the recent sharp rise in US bond yields and the simultaneous pressure on gold and stocks. The market is re-evaluating the future direction of global liquidity.
On the other hand, the AI industry is facing one of the most important stress tests since this bull market. Dalio described the current AI boom as a typical bubble not because AI has no value, but rather that the capital market is already pricing future growth far faster than actual profits can be realized. From Meta's plan to expand its AI footprint through stock financing, to large-scale computing power cooperation between Google and SpaceX, to the US government considering direct investment in AI companies, the market is entering a new round of capital expenditure competition. However, as interest rates rise, financing costs increase, and a large number of IPOs and additional shares continue to draw out market liquidity, whether the capital market can continue to support such huge valuations will become an important focus of observation in the coming quarters.
For the crypto market, what really needs to be paid attention to is not a single event, but whether global liquidity has begun to enter a contraction cycle. If gold is competing with the US dollar, then Bitcoin is actually competing with global liquidity. Risky assets often benefit when the market believes that the Federal Reserve will continue to provide liquidity; but when the market begins to accept the possibility that high interest rates will last longer or even raise interest rates again, risk asset valuations face repricing pressure. Currently, the market is facing the triple challenge of energy inflation risks brought about by geopolitical conflicts, the withdrawal of capital from huge financing in the AI industry, and the shift in policy expectations from the Federal Reserve. This week's US CPI, Chinese inflation and financial data, ECB decisions, and SpaceX listing progress may all be important catalysts affecting market risk appetite. Market volatility will probably remain high until a new liquidity narrative is established.
